.attn div margin: auto; background-color: #e8f5ff; border-left: solid #2196F3 3px; padding: 30px; margin-bottom: 10px;
.attn p font-size: 18px; line-height: 32px; color: #181818 !important;
.attn li font-size: 18px; line-height: 32px; color: #181818 !important;
May 5, 2022: The SBA has stopped accepting PPP applications due to insufficient funds. The SBA continues to fund outstanding applications which have been already approved.
Explore other loan options with this top ten lenders or go to the lending marketplace Lendio to get matched with the best offers for the business.
As a small company owner, the effects of COVID-19 probably hit near to home. Whether you’ve shuttered your company due to state laws or have were built with a decrease in revenue because of fewer customers, businesses worldwide are facing financial challenges as a result of this pandemic. In the United States, President Donald Trump has had steps to help small business owners through this challenging time, such as the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2022. A provision in the CARES Act was the Paycheck Protection Program, which provided eligible small businesses with forgivable loans as much as $10 million.
Funds from the first round of funding were depleted, but fortunately, additional help arrived whenever a new COVID relief package was signed into law on December 27, 2022. This package incorporates $284 billion to fund another round from the PPP. Beginning a few days of January 11, 2022, eligible small business owners can now make an application for additional financial relief.
Whether you overlooked the very first round or you were able to get much-needed funding for your business last summer, this post is perfect for you. This article concentrates on the newly-reopened PPP and just what steps to consider to obtain funded. If you possess a small company and also have employees in your payroll, the PPP loan will benefit you. Continue reading to explore this program, how to know if you qualify, and how to navigate the applying process with ease.
How To Apply For A PPP Loan
Does a PPP loan sound like it would try taking some from the financial burden off your company? If that's the case, the next step is to submit your application. Unclear about where to start? Continue reading for any step-by-step guide regarding how to make an application for PPP second draw funding.
1) Make Sure You Qualify
While a PPP loan might be simpler to obtain than the usual traditional loan, you must still meet the prerequisites to qualify. Every business can apply with this loan, as long as they meet the size standards set through the SBA.
For-profit businesses, nonprofit organizations, independent contractors, sole proprietors, and other businesses may apply for the PPP loan. To qualify for loan forgiveness, you must maintain your payroll and quantity of employees and employ the loan for any qualifying purpose. You will have to certify through good faith that you'll make use of the loan for its intended purpose which your company needs loan funds during this time of economic uncertainty.
PPP loans are available to businesses that were functioning just before February 15, 2022. Publically-traded companies and businesses that have significant operations with the People’s Republic of China are ineligible to try to get a second PPP loan.
Unsure if you qualify for another PPP loan? Check out all the rules as well as for PPP round 2 before you apply.
2) Look for a Lender
Once you’ve determined that you qualify for a PPP loan, the next step is to pick your lender. You can apply through an SBA lender or a federally insured lender, including credit unions. Other regulated lenders could also offer the PPP loan. Begin with any financial institution you already use. Whether or not the PPP loan isn’t offered, they might be in a position to point you in the right direction. You can also use the SBA’s Lender Match tool to locate an SBA lender online or in your area.
You don’t even have to leave your home or office to try to get a PPP loan. Take a look at these online lenders which are offering PPP loans to qualified businesses.
3) Complete Your Application
Once you’ve found a lender, you’ll be asked to complete the PPP application for the loan. It’s worth noting that there are two applications according to whether you’ve previously received a PPP loan. We’ll go more in to the two applications inside a later section.
Both PPP applications are pretty short and simple. You'll be required to provide some fundamental information about your business, including your business’s legal structure, average monthly payroll costs, and knowledge for all owners with a minimum of a 20% stake in the industry. You must also state the loan’s purpose and answer several questions which will determine if your company is entitled to funding.
In addition to your application, you must also submit payroll documentation. This payroll documentation should support the numbers from your application to find out should you qualify for a PPP loan and how much you qualify to receive. You should also be sure you have other documentation available that may be required by your lender. This includes however is not limited to tax documents, employee W-2s, organizational documents, and government-issued identification.
4) Keep In Touch With Your Lender
While you wait for your loan decision, it’s important to connect with your lender. Additional information or documentation may be required as the loan has been processed, so look for emails or telephone calls requesting these details. Failure to communicate with your lender promptly can cause delays within the application process and receiving your funds.
How To use: First VS Second Draw
There are a few different rules for first-time PPP borrowers and businesses that take another draw.
When trying to get a PPP loan, make sure to use the correct application. The SBA has issued two separate applications. Form 2483 is for first-time borrowers which have not previously received PPP funds. Form 2483-SD is the application for borrowers applying for a second draw.
Borrowers that have already received a PPP loan may be eligible for a a second loan so long as certain conditions are met. In addition to meeting what's needed that were in place once the first loan was received, second-time borrowers should also meet additional requirements. Included in this are:
- Funds From The First Draw: To qualify for a second draw, borrowers should have already used or plan to use all funds from their first draw.
- Employees: Second-time borrowers should have 300 or fewer employees.
- Reduction In Gross Receipts: To get another loan, a company must demonstrate a discount of at least 25% in gross receipts for comparable quarters in 2022 and 2022.
If you previously applied for a PPP loan and returned all or part of the funds, you might be eligible to reapply for a first draw. Should you did not accept the entire amount of your first draw, it may be easy to modify the first draw application. If either of those scenarios pertains to you, discuss your options together with your lender.
Borrowers who've already received PPP funds may opt to use the same lender as before or choose another qualified lender for any second draw.
Avoid These Common PPP Application for the loan Mistakes
From falling for scams to submitting a credit card applicatoin with any mistakes, there are some mistakes that could delay the processing of the loan or even place your identity and banking account at risk. Here’s what to consider.
Don’t Just Bet Around the Big Banks
It may be tempting to rush towards the nearest bank to apply for your PPP loan. While you certainly can use with the big players, borrowers are finding that working with smaller lenders is simple and funding is fast. Check with your local small banks and lending institutions — or even give an online marketplace a try — to find the right lender for you personally.
Beware Of PPP Scams
While the PPP application process isn't very difficult and quick when compared with other SBA loans, you will find scammers out there looking to take advantage of small businesses. Watch out for shady lending websites that advertise faster funding. You need to only make use of a reputable lender, so your quest before handing off your personal information.
Also, be on your guard when it comes to communications using the SBA or perhaps your lender. Be sure to look into the sender’s current email address or the caller’s telephone number to ensure the communication is legit. If you’re unsure, you can always make use of the SBA’s official website or your lender to initiate contact.
Check The application For Accuracy
Always double-check the information on your application is accurate. Ensure your payroll details are current and all sorts of required documentation is current. An easy mistake can potentially delay the loan, check that things are accurate before it’s submitted for processing.
Calculate Correctly
There are a few calculations that you need to make sure are accurate before the application is submitted. Your average monthly payroll should be accurate and is used to determine your borrowing limits. The PPP application offers guidance on performing these calculations correctly, and you can also direct any questions to your lender.
What Happens Once you Apply
Once you’ve found your lender and have submitted your application, it’s time to play the waiting game. Unfortunately, there isn't any status tracker that lets you check your loan’s status. Instead, you have to wait to listen to back out of your lender in regards to whether the application is approved so when you are very likely funds hitting your money.
If you haven’t heard anything, you can reach out to your lender, but simply know that they are being employed as quickly as they possibly can to help you secure the loan.
More About PPP Loans
In these times of uncertainty, it’s simple to feel overwhelmed. Fortunately, when it comes to PPP loans, you want to help to make the entire process of getting funded as easy as possible. Whether you'd like to learn the differences between round one and round a couple of PPP funding or you’re searching for a bank to fund your PPP loan, we attempt to provide you with the most up-to-date information to create applying for — and receiving — a PPP loan as simple and painless as possible. Best of luck!
